The index is composed of three components, all of which saw increases in June. Expectations for future sales rose nine points to a 61, the highest level for that metric since March 2006. The current sales conditions index was up to a 56 while the gauge of prospective buyer traffic rose to 40.

The monthly builder confidence survey asks home builders to rate current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.”

It averages the scores of those responses on a scale where any reading over 50 indicates builder confidence in good market conditions.